PARIS Oct 18 AccorHotels, Europe's
top hotels group, cut back the upper end of its 2016 profit
target range on Tuesday after French and Belgian operations were
hit by security fears in the third quarter.

The world's fifth-largest hotel group said these two
countries remained a major point of vigilance for the group even
though it achieved robust growth in most of its other key
markets - including Britain, where the weak post-Brexit pound
induced people to stay in the country for their holidays and
attracted foreign visitors.

AccorHotels, undergoing an overhaul begun by Chief Executive
Sebastien Bazin in 2013, said it was now forecasting a 2016
operating profit of between 670 million and 690 million euros.

This compared with a previous range of 670 million euros and
720 million euros for 2016 and against 665 million in 2015.

Weakness in France, the group's largest market accounting
for 30 percent of revenue and EBIT, was the main reason for the
revision, Chief Financial Officer Jean-Jacques Morin told a
conference call.

Third quarter sales rose 1.8 percent to 1.538 billion euros
($1.69 billion)like-for-like, a slight deceleration from 2
percent growth in the second quarter.

Growth was robust in the key markets of Germany and Britain,
where a weak pound following Britain's vote to leave the EU led
the British to favour their own country for the holidays.

Britain is the group's third-largest market after France and
Germany, accounting for around 15 percent of its sales and EBIT.
UK sales grew 2.2 percent like-for-like in the quarter.

"The weak British pound boosted foreign short-stay leisure
sector and led to the British favouring the United Kingdom as a
main holiday destination," the group said in a statement.

Revenue in America rose 19 percent, driven by the
Olympic games in Rio and by business in North America.

In France, however, revenue fell 4.7 percent in the third
quarter and Revenue per Available Room (RevPar) in Paris alone
fell 18 percent due to safety fears following Islamist attacks.

Morin said he expected the trend in France to slightly
improve in the fourth quarter thanks to more favorable year-ago
comparables and the Paris Motor Show and the SIAL food fair.

"It will be some time however before demand improves," he
said

Foreign tourist arrivals to France could fall 4-5 percent
this year and research firm KPMG warned that French hotels could
suffer a revenue fall of 10 percent in 2016.